Bo Rothstein Corruption and Social Trust: Why the fish rots

Bo Rothstein
Corruption and Social
Trust: Why the Fish Rots
from the Head Down
Social Trust and the State
With the publication of Robert Putnam’s “modern classic” Making
Democracy Work in 1993 and his subsequent book, Bowling Alone, in 2000,
the issue of social capital has become a huge research industry. Defined
as a combination of interpersonal generalized (a.k.a. social) trust and
networks based on reciprocity, social capital is seen as a major asset
for individuals as well as groups and societies (Castiglione, van Deth,
and Wolleb 2008; Svendsen and Svendsen 2009). Although, as he readily admits, Putnam was not the first to put forward the importance of
social capital, it was clearly he who showed how it could be used in
important (and very ingeniously designed) empirical research (1993).
Putnam’s work came largely to be interpreted as putting the importance of civil society and voluntary associations on the agenda. By being
active in voluntary associations, citizens would learn to develop social
trust and understand the importance of positive reciprocity (Rothstein
2011). For many, this provided arguments for a political agenda in which
the responsibilities of the state for social welfare should be scaled back
and replaced with an emphasis on the importance of voluntary associations. It was argued that one had reason to expect that with “big
government” we should see a “crowding out” effect. The expansion of
the responsibilities of the state should, it was argued, be detrimental
to the development of a vibrant civil society (Ostrom 2000). Moreover,
it was argued that in a society where the government takes on the
social research Vol. 80 : No. 4 : Winter 2013 1009
responsibility for a large number of social needs, people do not have to
develop and maintain trusting relations and invest in social networks
(Cohen and Arato 1993). Social capital research has to a large extent
been used by several governments and policy organizations to send a
message to people that the bad things in their society are caused by too
little volunteering (Putnam and Feldstein 2003; Winter 2002; Woolcock
and Narayan 2000).
However, when the social capital and social trust research
agenda went comparative, it came as a surprise to many that when
this concept was being empirically researched, the Nordic countries came out on top irrespective of what measures were being used
(Rothstein 2002). Much can be said about the Nordic countries, but
not that they are countries with small and noninterventionist governments. In fact, available empirical studies show that interpersonal
generalized trust is highest in the Nordic countries. Moreover, citizens in these countries are among the most active in voluntary associations (Uslaner 2002). In addition, according to available measures of
corruption and other indices of “quality of government,” the Nordic
countries are among the “cleanest” in the world (Holmberg and
Rothstein 2012).
Why Social Trust is Important
One reason for the strong interest in social trust is that, as measured
in surveys, it correlates with a number of other variables that for most
people are normatively highly desirable. At the individual level, people
who believe that most other people in their society in general can be
trusted are also more inclined to have a positive view of their democratic institutions, participate more in politics, and be more active
in civic organizations. They are also more tolerant of minorities and
people who are not like themselves. Trusting people also have a more
optimistic view of their possibilities for having an influence over their
own life chances and, not least important, being more happy with
how their life is going (Leung et al. 2011; Helliwell 2006; Dinesen 2013;
Delhey and Newton 2005; Uslaner 2002).
social research
The same positive pattern exists at the societal level. Cities,
regions, and countries with more trusting people are likely to have
better working democratic institutions, more open economies, greater
economic growth, and less crime and corruption (Bjørnskov 2009,
Keefer, and Knack 2005, Richey 2010; Uslaner 2008). Both at the individual and societal level, many things that are normatively desirable
seem connected to social trust and social capital.
As stated above, social trust varies widely across nations. In
Norway, Denmark, and the Netherlands, around 60 percent of people
state in surveys that they believe most other people can be trusted,
while in Brazil, the Philippines, and Turkey, around 10 percent state
that they think people in general can be trusted (Rothstein and Uslaner
2005). As for the interpretation of what the standard survey question
about social trust measures, I have come to support the idea launched
by Uslaner (2002) as well as by Delhey and Newton (2004), who argue
that when people say whether or not they think that “most other
people can be trusted,” this can be understood as their evaluation of the
moral standard of the society in which they live. This implies that trust
can be seen as an informal institution, as argued by North, and therefore as a source of social solidarity, creating a belief system according
to which the various groups in society have a shared responsibility to
provide public goods as well as possibilities for those who happen to be
endowed with fewer resources (Uslaner 2002, chap. 7).
The theoretical reason trust is important comes from “the problem with many names” in the social sciences. Among these names are
social dilemmas, the problem of collective action, the provision of
public goods, the tragedy of the commons, and the prisoners’ dilemma
(cf. Ostrom 1998). Behind all these metaphors lies a problem that can be
described as follows: a group of agents know that if they can collaborate
they will all gain. However, this collaboration is not costless but carries
economic burdens or other effort for all involved. Without the contribution of (almost) all agents, the good will not be produced because
it makes no sense for the individual agent to contribute if she or he
does not trust that (almost) everyone else will contribute. Moreover,
Corruption and Social Trust
what is going to be produced is by definition a public good and can
thereby be consumed by everyone regardless of whether or not any
given individual has contributed. There is thus always a risk that agents
will act opportunistically (a.k.a. free-ride), hoping that they can reap
the benefits of the good without contributing. Without trust that most
agents will refrain from such treacherous behavior, most agents will
not contribute to the good in question. The end result of this lack of
trust is that everyone in the group stands to lose, although all know
that if they could trust each other they would all be better off.
Examples of this problem are endless. It makes no sense to be the
only one who recycles the garbage, pays what is to be paid in taxes, does
not abuse the social insurance system, follows the rule of law, abstains
from participating in corruption, does not overuse the group’s common
natural resources, or shows up well prepared to the academic department’s research seminar. Since trust is a psychologically delicate thing
that is hard to repair once it has become truly damaged, I prefer the
metaphor “social traps,” since agents in a group that have lost trust in
one another cannot easily mimic or fabricate the level of trust needed
to ensure collaboration even if they all know that they would benefit if
they could (Ostrom 1998; Rothstein 2005).
If That Important, How can Social Trust be
The problem with this research approach is that in the abundance of
positive associations between generalized trust, social capital, and various desired social and political outcomes, the sources of social trust have
remained somewhat of a mystery. Simply put, if social trust/capital is
such an important societal resource, we need to know more about how
it is generated and maintained (Hooghe and Stolle 2003).
The social capital literature is strongly divided on the question
of the causes and origins of social trust. On one side are scholars who
argue that variations in the amount of social trust can be explained
primarily by society-centered approaches (Hooghe and Stolle 2003). In
this Tocquevillian approach, the capacity of a society to produce social
social research
capital among its citizens is determined by its long-term experience
of social organization, anchored in historical and cultural experiences
that can be traced back over very long periods. The society-centered
approach views regular social interaction, preferably through activity in voluntary associations, as the most important mechanism for
the generation of social capital. Following the Tocquevillian tradition,
formal and informal associations and networks are seen as creators
of social capital because of their socializing effects on democratic and
cooperative values and norms.
A number of studies carried out in different democratic countries
over the last decade have called into question the effect that participation in voluntary associations with benevolent purposes has on social
trust and the willingness to cooperate outside of the specific group.
While it is true that people who are “joiners” also generally trust others
more, this seems to be an effect of self-selection. People who for some
other reason score high on the social ability to trust and cooperate with
others disproportionately join voluntary associations. However, activity
in such organizations does not add much to these desired traits, at least
not in adults. Members become more trusting purely of their fellow
members and they cooperate more for group purposes only (Stolle
2003; Uslaner 2002). Thus the evidence that associational membership of adults creates social capital that can be used in the wider society
has not survived empirical testing (Armony 2004; Delhey and Newton
2003; Dinesen 2013, Claiborn and Martin 2000; Herreros 2004; Robbins
2011; Wollebæck and Selle 2003). To take one example: one large-scale
empirical study aiming at explaining variations in social trust based on
the World Values Study Surveys and covering no less than 60 countries
concludes that “perhaps most important and most surprising, none of
the four measures of voluntary activity stood up to statistical tests, in
spite of the importance attached to them in a large body of writing,
from de Tocqueville onwards” (Delhey and Newton 2004, 27).
Other types of social interactions might do the job, yet a second
problem arises. Even if we accept the importance of voluntary engagement, not all associations serve a normatively desirable purpose. In
Corruption and Social Trust
fact, many associations are established to create distrust. Berman (1997)
has shown that the Nazis in Weimar Germany used existing voluntary
associations as vehicles for their Machtübername in 1932. A recent study
using quantitative measures shows that the more dense the networks
of civic associations in German towns between 1919 and 1933, the
stronger was the support for the Nazi party (Satyanath, Voigtlaender,
and Voth 2013).
As a response to the failure of the society-centered approach to
produce good empirical indicators for its claims about how the causal
mechanisms generating social trust operate, the institution-centered
accounts of social capital theory claim that for social trust to flourish it
needs to be embedded in and linked to the political context as well as
formal political and legal institutions (Berman 1997; Encarnación 2003;
Robbins 2011; Rothstein and Uslaner 2005; Rothstein and Eek 2000;
Kumlin and Rothstein 2010; You 2012; Villoria, Van Ryan, and Lavena
2013; Richey 2010). According to this group of scholars, who base their
research on historical case studies, experiments, or large-n survey data
(or all three), it is trustworthy, uncorrupt, honest, impartial government
institutions that exercise public power and implement policies in a fair
manner that create social trust and social capital. For example, Delhey
and Newton concluded from their above mentioned study that “government, especially corruption-free and democratic government, seems to
set a structure in which individuals are able to act in a trustworthy
manner and not suffer, and in which they can reasonably expect that
most others will generally do the same” (2004, 28). Using survey data
from 29 European countries, Bjørnskov (2004) concluded that a high
level of social trust is strongly correlated with a low level of corruption.
Another study, also based on comparative survey data, concludes that
“the central contention . . . is that political institutions that support
norms of fairness, universality, and the division of power contribute
to the formation of inter-personal trust” (Freitag and Buhlmann 2005).
Using scenario experiments in low trust/high corruption
Romania and in high trust/low corruption Sweden, Rothstein and
Eek (2009) found that people in both these countries who experience
social research
corruption among public health-care workers or the local police when
travelling in an “unknown city in an unfamiliar country” do not only
lose trust in these authorities but also in other people in general in
that “unknown” society. Another example is based on survey data from
the European Social Survey carried out in 2008 that covers 29 countries in both Western and Eastern Europe (Svallfors 2013). This survey
asked questions related to corruption, such as whether respondents
perceived that the tax authorities or public health care gave “special
advantages to certain people or deal with everyone equally.” The results
are the following: citizens who state in the survey that they have a preference for more economic equality but live in a country where they
perceive that the quality of government institutions is low will in the
same survey indicate that they prefer lower taxes and less social spending. However, the same “ideological type” of respondent who happens
to live in a European country where he or she believes that the government authorities are guided by norms such as impartiality and fairness
will answer that he or she is willing to pay higher taxes for more social
spending. This result is supported in a study using aggregate data about
welfare state spending and quality of government for Western liberal
democracies (Rothstein, Samanni, and Teorell 2012). When controlling
for variables that measure political mobilization and electoral success
from left parties, the higher the quality of government, the more countries will spend on social services and benefits. To summarize our interpretation of these studies, citizens who live in a country where they
perceive that corruption or other forms of unfairness in the public
administration is common are likely to be less supportive of the idea
that the state should take responsibility for policies even if they ideologically support the goals such policies have. One likely reason is that
they lack trust in other citizens to (a) pay their taxes and (b) not overuse
or abuse the social insurances.
Another recent large-scale survey consisting of 84,000 citizens/
respondents in 212 regions within 25 European countries gives strong
support to the theory that high levels of corruption/low levels of quality
of government is a causal factor behind low social trust. In addition to
Corruption and Social Trust
the standard question about social trust, this survey contains detailed
questions about both perceptions and experiences of the extent to
which three regional public services (policy, health care, education)
are seen as impartial, high quality, and clean from corruption, all of
which is compiled into a measure of Quality of Government (henceforth QoG) (Charron, Lapuente, and Rothstein 2013). Taking advantage
of the extreme variation among European countries and regions in
both levels of social trust and QoG, this study shows evidence for the
impact of QoG on variations in social trust in European regions also
when controlling for wealth. The effects of civic engagement, income
inequality, and ethnic diversity (measured as the percent of citizens in
each region born outside the European Union) are negligible, while the
effects of QoG are robust and strong (Charron and Rothstein 2013).
It should be underlined that these scholars find that social trust
is related not to what takes place on the “input” side of the representational democratic system but to what goes on at the “output” side in
the public administration: the police, the courts, and public services.
The theoretical reason people’s confidence in these two types of political institutions differs is as follows. On the representational side, one
of the main roles for political institutions is to be partisan. A political
party that holds government power or a majority in the parliament
is supposed to try to implement its ideology in a partisan way. Thus,
people who support the ideology of the ruling party (or parties) are
likely to have confidence in them, while citizens who oppose their
ideology are likely to report a lack of confidence. However, it is less
likely that this type of partisan trust or distrust should influence one’s
generalized trust in other people. There is to my knowledge no plausible causal mechanism linking these two phenomena, and empirically
the statistical correlations that come from surveys on these measures
are insignificant (Rothstein and Stolle 2008).
What comes out of this research is that the major source of variations in generalized trust is to be found at the other side of the state
machinery, namely the legal and administrative branches of the state
responsible for the implementation of public policies. In several stud-
social research
ies, the strongest correlations with social trust are trust in the rule of
law institutions, that is, the police and the courts (Rothstein and Stolle
2008; Holmberg and Weibull 2009). A theoretical reason for this is that,
compared to other political institutions that exercise public policy, the
courts, the police, and the other legal institutions of the state have a
special task: to detect and punish people who, in game theory parlance,
use opportunistic strategies (I prefer the term treacherous). In other words,
rule of law institutions are in the business of taking care of people who
are better not trusted. Results from factor analyses of World Values
Survey data as well as Swedish survey data largely confirm that people
distinguish between trust in different government institutions and that
this creates different dimensions of institutional trust (Rothstein and
Stolle 2008).
The Corruption-Trust Theory
Social trust can be seen as an example of what North has defined as
the informal institutions in a society, which are established systems
of beliefs about the behavior of others (North 1998a). The effects of an
informal institution such as social trust can be the following: in a group
(or society) where most agents’ default position is that most people
can generally be trusted, transaction costs will be lower and many
forms of mutually beneficial cooperation will therefore take place
that would not have been possible if social trust was lacking (Svendsen
and Svendsen 2003). For example, in economic relations, lack of social
trust will limit transactions between economic agents to people of the
same ethnic clan or tribe while excluding members of disfavored or
unknown groups, thus hindering economic efficiency (Rose-Ackerman
and Kornai 2004, cf. Rose-Ackerman 2004).
Social trust as an informal institution is essential if groups or
societies will succeed in establishing socially efficient formal institutions such as the rule of law, impartial civil services, and uncorrupt
public administrations. The reason is that such formal institutions are
“second order” public goods and thereby prone to the standard problems of free-riding as well as opportunistic and treacherous behavior.
Corruption and Social Trust
It is in these ways that social trust can be seen as a collective asset,
a social capital (Coleman 1990, 99). This implies that the outcome of
social and economic interactions depends on how the real-life context
has constructed the agents’ mutual expectations about what kind of
reciprocity to expect and whether the other agents can be trusted or
not (Fehr and Fischbacher 2005). As has been argued from the perspective of evolutionary game theory, people cannot be expected to base
their decisions about “how to play” in social dilemmas on perfect information about others because such information is impossible to get.
Instead, they will try to make inferences from “the history of play” of
other people (Young 1998, 5). Moreover, it is not the case that economic
competition between rational agents will weed out agents with low
trust and replace them with high trust agents, not even over the long
run. On the contrary, as Douglass North has argued:
The rational choice paradigm assumes that people know
what is in their self-interest and act accordingly, or at the
very least that competition will weed out those who make
incorrect choices and reward those who make correct
choices. But it is impossible to reconcile this argument
with the historical and contemporary record (North 1998b,
493; cf. Frohlich and Oppenheimer 2006).
I thus agree with Miller that the major lesson we should take from
noncooperative game theory for this discussion is not about choice, strategy, or individual rationality but that we have good reasons to expect
“dysfunctional results from individual rationality” (Miller 2000, 540).
However, as the huge variation in the level of social trust and levels
of corruption between countries shows, the type of theory we need is
not a general (more or less structural-functionalist) one starting from
some universal notion of human behavior. The reason for this is simple,
namely that such a theory cannot explain the huge variation that exists
(unless one argues that there are genetic variations in the ability to make
rational choices or develop social trust). Similarly, the type of theories we
social research
need are not the ones that explain why all societies end up with socially
efficient (or dysfunctional) institutions. Rather, the sort of theory we need
is one that can explain the huge variation in social trust and levels of
corruption and the quality of government that exists in the world today.
Or in plain language, why, for instance, is corruption in Denmark lower
than in Nigeria, social trust in Finland so much higher than in Romania,
and why are the informal social institutions that embed market relations
in Mexico different from those in Canada?
The epistemological approach known as scientific realism puts
great weight on the construction of theories for how the causal mechanisms between variables operate (MacDonald 2003; Shapiro 2005). A
great deal of research in social psychology has shown the importance
of social trust for achieving a socially efficient outcome in “social traps”
situations (Dawes and Messick 2000; Sally 1995). There is also a lot of
research in social psychology showing that procedural fairness has a
positive impact on the willingness of individuals to accept outcomes
that are substantially negative for them (Tyler 2003). However, as De
Cremer et al. have argued, “although behavioral consequences as a
function of procedural fairness . . . seem logical from a theoretical point
of view—amazingly little effort has been done to understand why such
an effect could occur” (De Cremer, Tyler, and den Ouden 2005, 395).
The results they present in their study (based also on scenario experiments) show that “fair procedures” increase cooperation. This seems
to be based on the following causality: institutions that are perceived
to be fair increase group identity and affiliation so that the goal of the
group merges with the goal of the individuals. “Being treated fairly and
respectfully will install among group members a feeling of inclusiveness” from which also follows increased social trust (De Cremer et al.
2005, 402). This is in line with the experimental results from the “horizontal trust game,” which shows that individuals who sense a higher
affiliation to the group also trust that others in the group will reciprocate (Ostrom 2005, 74).
It is not self-evident that people who live in highly corrupt
societies should have low social trust. One could make the opposite
Corruption and Social Trust
argument, that in order to make life bearable in a very corrupt or clientelistic society, ordinary citizens have to develop a lot of informal social
contacts that they can trust. However, this does not seem to be the case.
Instead, they seem to develop mistrust, envy, pessimism, and cynicism toward “people in general” (Csepeli et al. 2004). The type of trust
they may develop is what Uslaner (2002) calls “particularized” trust,
which implies that one only trusts very close friends and relatives but
is distrustful of people outside one’s close circle. As Uslaner shows, this
type of trust is actually the opposite of social trust, which entails giving
people you do not know the benefit of the doubt and having an optimistic outlook for your future interactions with “other people in general.”
The theory I will present starts from the presumption that when
it comes to establishing beliefs about social trust, people make inferences from the behavior they encounter from public officials. Because
it is impossible to know the trustworthiness of “most people” in a society, people must rely on “imperfect information” when they form their
beliefs about social trust. Since, as stated above, social trust can be interpreted as people’s moral evaluation of the society in which they live,
it makes sense that the behavior of public officials is one very important device that people use when forming beliefs about to what extent
people in general can be trusted. In experimental noncooperative game
theory, this is known as “heuristics,” which can be understood as the
kind of clues people who lack perfect information use when they have
to decide if they should or should not trust other people they have to
deal with (cf. Ostrom 2005, 98). This corruption-trust theory consists of
three interrelated causal mechanisms (from Rothstein 2011, ch. 7):
4The inference from public officials. If public officials in a society are
known for being corrupt, partial, or untrustworthy, citizens will
believe that even people whom the law requires to act in the
service of the public cannot be trusted. From this, they will make an
inference that most other people cannot be trusted either.
4The inference from people in general. Citizens will be able to see that
most people in a society with corrupt officials must take part in
social research
corruption and similar practices in order to obtain what they feel
their rightful due. They will therefore make an inference that most other
people cannot be trusted.
4The inference from oneself. The individual will realize that to get by
in such a society, he will himself have to take part in corrupt or
clientelistic practices. Thus, being oneself an untrustworthy person
leads to the same inference as in 1 and 2, namely that most people
cannot be trusted.
The causal mechanisms specified here imply that individuals
make inferences from the type of information they have about how
society works, which they to a considerable extent get from how they
perceive the action of public officials. This information does not need
to be correct, of course, and does not have to be related to personal
experiences. Hearsay, rumors, collective memories, and the like are for
sure part of this story. Simply put, individuals have no other choice
than to form their system of beliefs from the imperfect information
that is available to them.
The first mechanism implies that individuals reason something
like this: “If it proves that I cannot trust the local policemen, judges,
teachers, and doctors, then whom in this society can I trust?” The ethics
of public officials become central here, not only with respect to how
they do their jobs but also to the signals they send to citizens about
what kind of “game” is being played in the society. The following mechanisms are a logical outcome of the first. People draw personal conclusions from the actions they observe in others—and they also draw
conclusions in the other direction. As the saying goes: “To know oneself
is to know others.”
Reciprocity, Corruption, and Social Trust
When striving for a society with low corruption and high social trust, it
is important to start from a correct understanding of “human nature.”
Ideas about “basic human nature” have had a long history in the social
sciences. I believe the matter has finally been resolved, mostly by
Corruption and Social Trust
experimental research (Henrich 2010; Bicchieri and Xiao 2009; Fehr
and Gintis 2007; Henrich 2004; Gintis et al. 2005). To make a long story
short, the idea of man as a “homo economicus” has simply been refuted
by this type of research. The results from laboratory-, fieldwork-, and
survey-based research that speak against man as a utility-maximizing rational agent are by now overwhelming. Self-interest is for sure
an important ingredient when people decide how to act, but it is far
from as dominating as has been portrayed in neoclassic economics.
Moreover, it would be impossible to solve the problem of corruption if
individual utility-maximizing self-interest were the only game in town.
The reason is that such individuals would always fall for the temptation
to “free-ride.” If a majority do this, such uncorrupt institutions would
never be established, and if by some chance uncorrupt institutions did
exist they would soon be destroyed. If all agents acted according to the
template prescribed in neoclassic economic theory, they would sooner
or later outsmart themselves into a suboptimal equilibrium. This is
a “social trap” type of situation, where all agents would be worse off
because even if they know they would all gain from cooperation, lacking trust in the others’ cooperation, they would themselves abstain
from cooperating (Rothstein 2005).
However, this new experimental (and to some extent, field)
research does not present humans as benevolent altruists prepared to
trust other individuals no matter what. Trust as such can certainly not
be a virtue (as trustworthiness is) since trusting opportunistic, corrupt,
and treacherous individuals or organizations is not only stupid but often
also quite dangerous. Such “blind trusting” altruistic individuals are
luckily also quite rare. What comes out from the experimental research
mentioned above is instead that reciprocity is the basic human orientation. The central idea here is that people are not so much motivated by
utility-based calculations or culturally induced norms. Instead, human
behavior is to a large extent determined by forward-looking strategic
thinking in the sense that what agents do depends on what they think
the other agents are going to do. Thus, the idea of reciprocity recasts
fundamentally how we should understand and explain human behav-
social research
ior. Instead of looking backward to what causes variation in utilitybased interests or culturally-induced norms, the important thing is to
understand how people’s forward-looking perceptions about “other
people” and especially their trustworthiness are constructed. Historical
experiences and “collective memories” certainly play a role here, but
research also shows that people update their perceptions based on new
information (Boyd, Gintis, and Bowles 2010).
Regarding the prospect for social trust and cooperation for
public goods, results from research show that most people are willing to engage in cooperation for common goals even if they will not
personally benefit from this materially (Levi 1998). However, for this to
happen, three specific conditions must be in place. First, people have
to be convinced that the policy is morally justified (substantial justice).
Second, people have to be convinced that most other agents can also
be trusted to cooperate—that is, that other agents are likely to abstain
from “free-riding.” Third, people have to be convinced that the policy
can be implemented in a fair and evenhanded manner (Levi 1998;
Rothstein 1998). The first issue is for the political philosophers to solve.
However, contrary to what most philosophers think—that a common
goal is normatively justified—is not enough to motivate people to cooperate. They need to be convinced that there are institutions that will act
so as to make free-riding the exception. For example, a tax administration that allows for massive tax evasion or a social insurance system
that cannot control overuse or abuse will be detrimental not only
for achieving what is considered normatively just but also for social
trust. In addition, the requirement for procedural justice demands
that public institutions must be able to deliver goods, services, and the
handling of “opportunistic” behavior in a manner that is acceptable,
fair, and respectful. This has been formulated in the following words by
the most remarkable philosopher of our time, John Rawls:
A just system must generate its own support. This means
that it must be arranged so as to bring about in its members
the corresponding sense of justice, an effective desire to act
Corruption and Social Trust
in accordance with its rules for reasons and justice. Thus,
the requirements of stability and the criterion of discouraging desires that conflict with the principles of justice put
further constraints on institutions. They must not only be
just but framed so as to encourage the virtue of justice in
those who take part in them (Rawls 1971, 261).
The central idea in this quote is how Rawls specifies that in order
to make a cooperative system sustainable, we have to be aware of the
existence of a feedback mechanism between people’s support for just
principles and their perceptions of the quality of the institutions that
are set up to implement these principles (Kumlin 2004). As shown
above, recent empirical research strongly supports Rawls argument in
the sense that individuals’ perceptions of forms of unfairness (or inefficiency) in the public institutions strongly influences their views about
whether “other people in general” in their society can be trusted. My
interpretation of these studies is that citizens that live in a country
where they perceive that corruption or other forms of unfairness in
the public administration is common are likely to be less supportive
of the idea that there should be a collective responsibility for policies
for increased social justice even if they ideologically support the goals
of these policies. The most likely reason is not that they are against
increased social justice or more public goods but that they will believe
that their social trust will not be reciprocated.
The Reciprocal Nature of Trust and Corruption
It is important to realize that reciprocity also has a dark side. History and
many contemporary events as well as experimental evidence show that
“ordinary people” are willing to engage in the most horrible atrocities
to other people (again, also if they do not personally benefit from their
actions) if they are convinced that those “other people” would otherwise harm them. However, bad reciprocity also exists in less dramatic
(and horrible) circumstances. As described by Fehr and Fishbacher
(2005, 167), “If people believe that cheating on taxes, corruption and
abuses of the welfare state are wide-spread, they themselves are more
social research
likely to cheat on taxes, take bribes or abuse welfare state institutions.”
Distrust in other agents or in the institutions may lead to a vicious
circle that can break any system or policy set up to increase solidarity.
Again, Rawls did clearly see this problem between institutional design
and support for justice (which has sadly been neglected by most of his
followers in political philosophy):
For although men know that they share a common sense of
justice and that each wants to adhere to existing arrangements, they may nevertheless lack full confidence in one
another. They may suspect that some are not doing their
part, and so they may be tempted not to do theirs. The
general awareness of these temptations may eventually
cause the scheme to break down. The suspicion that others
are not honoring their duties and obligations is increased
by the fact that, in absence of the authoritative interpretation and enforcement of the rules, it is particularly easy to
find excuses for breaking them (Rawls 1971, 240).
It is clear that Rawls pointed to the problem of reciprocity in
the form of trust in others (“confidence”) and that he argues that it
is the existence of institutional arrangements that can handle “freeriding” and other forms of antisocial and opportunistic behavior that
are needed to avoid the breakdown of systems based on principles of
Thus, we arrive at the conclusion that the basic nature of human
behavior—reciprocity—can go both ways. On the one hand, the idea
of reciprocity stands against the cynicism about human nature central
to the interest-based theories that have dominated most economic
approaches in the social sciences (Ostrom 1998, 2000). On the other
hand, reciprocity is also in conflict with a naïve idea about human
nature as genuinely benevolent and trusting. Instead, reciprocity tells
us that if through the design of institutions we can make people trust
that most other agents in their society will behave in a trustworthy and
cooperative manner, they themselves will do likewise. If not, they will
Corruption and Social Trust
defect, even if the outcome will be a social trap type of situation and
thereby detrimental to their interests.
That reciprocity can go in different directions is also what we
see if we take just a simple look at most of the rankings of a country’s
performance that have now become abundant. The level of corruption, to take just one example, shows staggering differences between
countries. This particular “social bad” also serves as a good example
of why reciprocity is a better starting point for understanding human
behavior than its rivals. If we relied on cultural explanations, we would
have to say to our sisters and brothers in, for example, Nigeria that the
extremely high level of corruption in their country is caused by their
corrupt culture. Or if we started from interest-based explanations, we
would be unable to explain why the huge variation of corruption exists
without relying on either genetic or cultural explanations. However,
if we base our explanations on the idea of reciprocity, the explanation
for the high level of corruption in, for example, Pakistan is that the
institutions in place make it reasonable for most people to believe that
most other agents will be engaged in corrupt practices, and thus they
have no reason to believe that “in general, most people can be trusted”
(Rothstein 2010). Simply put, it makes no sense to be the only honest
policeman in a thoroughly corrupt police force.
It is important to underline that, contrary to what is taken for
granted in neoclassical economics, we have absolutely no reason to
believe that societies (or any group of agents) are able to produce the
type of noncorrupt, impartial, and fair institutions that they as a society would prosper from. A quick look at available measures shows that
a vast majority of the world’s population lives under either deeply
or fairly corrupt public authorities (Holmberg and Rothstein 2012).
History has turned out not to be efficient. The generally high levels
of corruption and low levels of QoG that we find in most contemporary countries turn out to have devastating effects on prosperity,
social well-being, health, satisfaction with life and, of course, social
trust. The lives of most people living under these conditions are, as
another famous philosopher stated it, likely to be “solitary, poor, brutish, nasty, and short.”
social research
Armony, Ariel C. 2004. The Dubious Link: Civic Engagement and Democrati­
zation. Stanford: Stanford University Press.
Berman, Sheri. 1997. “Civil Society and the Collapse of the Weimar
Republic.” World Politics 49 (3): 401–429.
Bicchieri, Chistina, and Erte Xiao. 2009. “Do the Right Thing: But Only if
Others Do So.” Journal of Behavioral Decision Making 22 (2): 191–208.
doi: 10.1002/bdm.621.
Bjørnskov, Christian. 2009. “Economic Growth.” In Handbook of Social
Capital, edited by Gert T. Svendsen and Gunnar L. H. Svendsen,
337–353. Cheltenham, UK: Edward Elgar.
Boyd, Robert, Herbert Gintis, and Samuel Bowles. 2010. “Coordinated
Punishment of Defectors Sustains Cooperation and Can Proliferate
When Rare.” Science 328 (5978): 617–620.
Castiglione, Dario, Jan van Deth, and Guglielmo Wolleb, eds. 2008.
Handbook of Social Capital. Oxford: Oxford University Press.
Charron, Nicholas, Victor Lapuente, and Bo Rothstein. 2013. Quality of
Government and Corruption from a European Perspective: A Comparative
Study of Good Government in EU Regions. Cheltenham, UK: Edward
Charron, Nicholas, and Bo Rothstein. 2013. The Effect of Quality of Government
on Social Trust in European Regions. Gothenburg: The Quality of
Government Institute, University of Gothenburg.
Claiborn, Michele P., and Paul S. Martin. 2000. “Trusting and Joining? An
Empirical Test of the Reciprocal Nature of Social Capital.” Political
Behavior 22 (4): 267–291.
Cohen, Jean L., and Andrew Arato. 1993. Civil Society and Political Theory.
Cambridge: MIT Press.
Coleman, James S. 1990. Foundations of Social Theory. Cambridge: Harvard
University Press.
Csepeli, György, Antal Örkéney, Maria Székelyi, and Barna Ildikó. 2004.
“Blindness to Success: Social Psychological Objectives Along the
Way to a Market Economy in Eastern Europe.” In Creating Social Trust
in Post-Socialist Transition, edited by János Kornai, Bo Rothstein and
Susan Rose-Ackerman, 213–240. New York: Palgrave/Macmillan.
Corruption and Social Trust
Dawes, Robin M., and David M. Messick. 2000. “Social Dilemmas.”
International Journal of Psychology 35 (2): 11–116.
De Cremer, David, Tom R. Tyler, and Nathalie den Ouden. 2005. “Managing
Cooperation via Procedural Fairness: The Mediating Influence of
Self-Other Merging.” Journal of Economic Psychology 26: 393–406.
Delhey, Jan, and Kenneth Newton. 2003. “Who Trusts? The Origins of
Social Trust in Seven Societies.” European Societies 5 (2): 93–137.
———. 2004. Social Trust: Global Pattern or Nordic Exceptionalism. Berlin:
Wissenschaftszentrum Berlin für Socialforschung.
———. 2005. “Predicting Cross-National Levels of Social Trust: Global
Pattern or Nordic Exceptionalism?” European Sociological Review 21
(4): 311–327.
Dinesen, Peter Thisted. 2013. “Where You Come From or Where You
Live? Examining the Cultural and Institutional Explanation of
Generalized Trust Using Migration as a Natural Experiment.”
European Sociological Review 29 (1): 114–128. doi: 10.1093/esr/
Encarnación, Omar G. 2003. The Myth of Civil Society: Social Capital and
Democratic Consolidation in Spain and Brazil. New York: Palgrave/
Fehr, Ernst, and Urs Fischbacher. 2005. “The Economics of Strong
Reciprocity.” In Moral Sentiments and Material Interests. The Foundations
for Cooperation in Economic Life, edited by Herbert Gintis, Samuel
Bowles, Robert Boyd, and Ernst Fehr, 151–193. Cambridge: MIT
Fehr, Ernst, and Herbert Gintis. 2007. “Human Motivation and Social
Cooperation: Experimental and Analytical Foundations.” Annual
Review of Sociology 33: 43–64.
Freitag, Markus, and M. Buhlmann. 2005. “Political Institutions and the
Formation of Social Trust. An International Comparison.” Politische
Vierteljahresschrift 46 (4): 575–586.
Frohlich, Norman, and Joe A. Oppenheimer. 2006. “Skating on Thin Ice:
Cracks in the Public Choice Foundation.” Journal of Theoretical Politics
18 (3): 235–266.
Gintis, Herbert, Samuel Bowles, Robert Boyd, and Ernst Fehr, eds. 2005.
social research
Moral Sentiments and Material Interests. The Foundations for Cooperation
in Economic Life. Cambridge: MIT Press.
Helliwell, John F. 2006. “Well-Being, Social Capital, and Public Policy:
What’s New?” Economic Journal 116 (510): C34–C45.
Henrich, Joe et al. 2010. “Markets, Religion, Community Size, and the
Evolution of Fairness and Punishment.” Science 327 (5972): 1480–
Henrich, Joseph Patrick. 2004. Foundations of Human Sociality: Economic
Experiments and Ethnographic Evidence from Fifteen Small-Scale Societies.
New York: Oxford University Press.
Herreros, Francisco. 2004. The Problem of Forming Social Capital: Why Trust?
New York: Palgrave/Macmillan.
Holmberg, Sören, and Bo Rothstein, eds. 2012. Good Government:
The Relevance of Political Science. Cheltenham, UK: Edward
Hooghe, Marc, and Dietlind Stolle, eds. 2003. Generating Social Capital:
Civil Society and Institutions in a Comparative Perspective. New York:
Keefer, Philip, and Stephen Knack. 2005. “Social Capital, Social Norms and
the New Instituitonal Economics.” In Handbook of New Institutional
Economics, edited by Claude Menard and Mary M. Shirley, 701–725.
Amsterdam: Springer.
Kumlin, Staffan. 2004. The Personal and the Political: How Personal Welfare
State Experiences Affect Political Trust and Ideology. New York: Palgrave/
Kumlin, Staffan, and Bo Rothstein. 2010. “Questioning the New Liberal
Dilemma: Immigrants, Social Networks and Institutional Fairness.”
Comparative Politics 41 (1): 63–87.
Leung, Ambrose, Cheryl Kier, Tak Fung, Linda Fung, and Robert Sproule.
2011. “Searching for Happiness: The Importance of Social Capital.”
Journal of Happiness Studies 12 (3): 443-462. doi: 10.1007/s10902-0109208-8.
Levi, Margaret. 1998. Consent, Dissent, and Patriotism. New York: Cambridge
University Press.
MacDonald, Paul K. 2003. “Useful Fiction or Miracle Maker: The
Corruption and Social Trust
Competing Epistemological Foundations of Rational Choice
Theory.” American Political Science Review 97 (4): 551–565.
Miller, Gary J. 2000. “Rational Choice and Dysfunctional Institutions.”
Governance 13 (4): 535–547.
North, Douglass C. 1998a. “Economic Performance Through Time.” In
The New Institutionalism in Sociology, edited by Mary C. Brinton and
Victor Nee, 247–257. New York: Russell Sage Foundation.
———. 1998b. “Where Have We Been and Where Are We Going?” In
Economics, Values and Organization, edited by Avner Ben-Ner and Louis
Putterman, 491–508. Cambridge: Cambridge University Press.
Ostrom, Elinor. 1998. “A Behavioral Approach to the Rational Choice
Theory of Collective Action.” American Political Science Review 92 (1):
———. 2000. “Crowding Out Citizenship.” Scandinavian Political Studies
23 (1): 3–16.
———. 2005. Understanding Institutional Diversity. Princeton: Princeton
University Press.
Putnam, Robert D, Robert Leonardi, and Raffaella Y. Nanetti. 1993. Making
Democracy Work: Civic Traditions in Modern Italy. Princeton: Princeton
University Press.
Putnam, Robert D., and Lewis D. Feldstein. 2003. Better Together: Restoring
the American Community. New York: Simon and Schuster.
Rawls, John. 1971. A Theory of Justice. Oxford: Oxford University Press.
Richey, Sean. 2010. “The Impact of Corruption on Social Trust.” American
Politics Research 38 (4): 676-690. doi: 10.1177/1532673x09341531.
Robbins, Blaine G. 2011. “Neither Government nor Community Alone: A
Test of State-Centered Models of Generalized Trust.” Rationality and
Society 23 (3): 304–346. doi: 10.1177/1043463111404665.
Rose-Ackerman, Susan. 2004. “Establishing the Rule of Law.” In When
States Fail: Causes and Consequences, edited by Robert I. Rotberg,
182-218. Princeton: Princeton University Press.
Rose-Ackerman, Susan, and János Kornai, eds. 2004. Building a Trustworthy
State in Post-Socialist Transition. New York: Palgrave/Macmillan.
Rothstein, Bo. 1998. Just Institutions Matter: The Moral and Political Logic of the
Universal Welfare State. Cambridge, UK: Cambridge University Press.
social research
———. 2002. “Sweden: Social Capital in the Social Democratic State.”
In Democracies in Flux: The Evolution of Social Capital in Contemporary
Society, edited by Robert D. Putnam, 289-333. Oxford: Oxford
University Press.
———. 2011. The Quality of Government: Corruption, Social Trust and Inequality
in a Comparative Perspective. Chicago: University of Chicago Press.
Rothstein, Bo, and Daniel Eek. 2009. “Political Corruption and Social
Trust: An Experimental Approach.” Rationality and Society 21 (1):
Rothstein, Bo, Marcus Samanni, and Jan Teorell. 2012. “Explaining the
Welfare State: Power Resources vs. the Quality of Government.”
European Political Science Review 4 (1): 1–28.
Rothstein, Bo, and Eric M. Uslaner. 2005. “All for All. Equality, Corruption
and Social Trust.” World Politics 58 (3): 41–73.
Sally, David. 1995. “Conversation and Cooperation in Social Dilemmas:
A Metaanalysis of Experiments from 1958 to 1992.” Rationality and
Society 7 (1): 58–92.
Satyanath, Shanker, Nico Voigtlaender, and Hans-Joachim Voth. 2013.
Bowling for Fascism: Social Capital and the Rise of the Nazi Party in Weimar
Germany 1919–33. Cambridge, MA: National Bureau of Economic
Shapiro, Ian. 2005. The Flight From Reality in Human Sciences. Princeton:
Princeton University Pres.
Stolle, Dietlind. 2003. “The Sources of Social Capital.” In Generating Social
Capital: Civil Society and Institutions in a Comparative Perspective, edited
by Marc Hooghe and Dietlind Stolle, 18–40. New York: Palgrave/
Svallfors, Stefan. 2013. “Government Quality, Egalitarianism,
and Attitudes to Taxes and Social Spending: A European
Comparison.” European Political Science Review (online preview) 5 (3) :
Svendsen, Gert T., and Gunnar L. H. Svendsen. 2009. Handbook of
Social Capital: The Troika of Sociology, Political Science and Economics.
Cheltenham, UK: Edward Elgar.
Svendsen, Gunnar L. H., and Gert T. Svendsen. 2003. “On the Wealth of
Corruption and Social Trust
Nations: Bourdieuconomics and Social Capital.” Theory and Society
32 (5–6): 607–631.
Tyler, Tom R. 2003. “Procedural Justice, Legitimacy, and the Effective Rule
of Law.” Crime and Justice. An Annual Review of Research 30: 283–337.
Uslaner, Eric M. 2002. The Moral Foundation of Trust. New York: Cambridge
University Press.
———. 2008. Corruption, Inequality, and the Rule of Law: The Bulging Pocket
Makes the Easy Life. Cambridge, UK: Cambridge University Press.
Villoria, Manuel, Gregg G. Van Ryan, and Cecilia F. Lavena. 2013. “Social
and Political Consequences of Administrative Corruption: A Study
of Public Perceptions in Spain.” Public Administration Review 73 (1):
Winter, Ian, ed. 2002. Social Capital and Public Policy in Australia. Melbourne:
Australian Institute of Family Studies.
Wollebæck, Dag, and Per Selle. 2003. “Participation and Social Capital
Formation: Norway in a Comparative Perspective.” Scandinavian
Political Studies 26 (1): 67–91.
Woolcock, Michael, and Deepa Narayan. 2000. “Social Capital:
Implications for Development Theory, Research and Policy.” The
World Bank Research Observer 15: 225–249.
You, Jong-sun. 2012. “Social Trust: Fairness Matters More Than
Homogeneity.” Political Psychology 33 (5): 701–721. doi: 10.1111/j.14679221.2012.00893.x.
Young, H. Peyton. 1998. Individual Strategy and Social Structure: An Evolutionary
Theory of Institutions. Princeton: Princeton University Press.
social research